U.S. Rep. John Salazar's "no" vote on a 1,400-page cap-and-trade bill HR 2454 was the responsible vote. The bill, which had a 300-page amendment added to it at 3 a.m. on the day of the vote, needs to be further understood before it is advanced by Congress.
Salazar's vote reflected that fact. Our initial analysis of the bill indicates that Colorado's electric consumers would be sending their money to states such as California and New York in the House-passed climate-change plan. As the not-for-profit wholesale power supplier to 44 cooperatives in the West - 18 of which are in Colorado, including La Plata Electric Association - Tri-State Generation and Transmission Association has been working with its congressional delegation on solutions to manage our greenhouse gas footprint while keeping electricity affordable.
However, the current version of the bill passed by the House last week is not the answer. Under the cap-and-trade scheme, utilities will receive allowances to emit carbon dioxide - based on their annual sales and CO2 emissions. Tri-State's 44 member cooperative utilities will receive about half of the allowances they need, beginning in 2012.
Co-ops will have to purchase the remainder from a government-run auction or through the market, similar to a commodities exchange. The price of the allowances will be set by market conditions, with no cap to protect consumers if market prices for allowances increase beyond reason.
If having to play the market to keep the lights on won't be bad enough, other utilities will be on the other side of the trade - by virtue of receiving allowances based on their sales and well above their actual CO2 emissions. They stand to make millions of dollars. In fact, one eastern utility CEO recently told shareholders that his nuclear-fueled utility stands to make $1 billion dollars a year - some of which will come from Colorado's rural electric consumers.
Salazar was the state's lone Democrat to understand this wealth transfer isn't good for the Centennial State and its ratepayers.
Tri-State believes the challenge of managing greenhouse gases is best addressed by the advancement of technology and not a seemingly unworkable cap-and-trade program. However, a bill that transfers dollars from Colorado to California - enriching some but not taking one molecule of carbon out of the air - isn't the right solution.
Tri-State thanks Salazar for realizing this and looks forward to working with Sens. Michael Bennet and Mark Udall to fix the many problems contained in the House-passed cap and trade bill.
Mac McLennan is senior vice president, external affairs for Tri-State Generation and Transmission Association, Inc.